Topic 2: Management, Leadership and Decision Making Flashcards
What is the difference between a manager and a leader?
- Managers tell people what to do and they organise resources to get the job done.
- Leaders motivate people and inspire them to do things.
What are the main responsibilities of a manager?
- Set objectives
- Analyse and interpret data
- Make decisions
- Review of their decisions
- Lead their staff
What is meant by an autocratic leadership style?
Manager makes decisions on their own.
- Useful in a crisis, or with unskilled workers.
- Can demotivate able and intelligent workers.
What is meant by a paternalistic leadership style?
Softer form of autocratic style
- Consults the workers, explains the decisions and persuades staff
What is meant by democratic leadership style?
Leader encourages workforce to participate in decision making process.
- Discusses issues with workers, delegates responsibility and listens to advice.
- Leaders have confidence in their workers, which makes them motivated.
What is meant by laissez-faire?
A weak form of leadership
- Leaders offer employees support but rarely interfere in the running of the business
- Only appropriate for small team of highly motivated, able workers.
What internal factors may cause a manager to change leadership style?
- Urgent tasks e.g unexpected large order may require autocratic leader to tell everyone what to do.
- Large, unskilled workforce requires autocratic leader, small educated workforce suits a democratic leader.
What external factors may cause a manager to change leadership style?
- During economic hardship, a strong leader is needed to issue clear, quick demands.
- Democratic leaders may be more necessary in times of success, to communicate with employees.
Which grids can be used to assess management style?
1) Tannenbaum Schmidt Continuum
2) Blake Mouton Grid
What does the Tannenbaum Schmidt Continuum assess?
Places managers on a scale from autocratic management through increasing levels of participation in decision making.
What are the management styles identified by the Tannenbaum Schmidt Continuum?
1) Tells - autocratic
2) Sells - mostly autocratic but allows questions
3) Suggests - decision is discussed, opinions considered
4) Consults - decision is discussed and modified
5) Joins - workforce make solutions, manager decides
6) Delegates - team discusses and decides
7) Abdicates - team define and solve the problem.
What does the Blake Mouton Grid assess?
How much managers care for their employees and how much they care for production
What are the leadership styles identified by the Blake Mouton Grid?
1) Impoverished - low concern for people and low concern for production.
2) Produce-or-Perish - high concern for production, low concern for people
3) Country Club - high concern for people, low concern for production
4) Middle of the Road - average concern for people, average concern for production
5) Team - high concern for people, high concern for production
What is scientific decision making?
Decisions are made scientifically based on data and their outcomes are compared to the initial objectives.
What is intuitive decision making?
Decisions are made based on a ‘hunch’ or a gut instinct.
What are the advantages of scientific decision making?
- Reduces the risk of making expensive mistakes.
- Logical and structured
What are the disadvantages of scientific decision making?
- Costly and time-consuming
- Less original and creative than intuition
- Must be unbiased and up to date.
What are the advantages of intuitive decision making?
- Can be done quickly
- ## Can be used in new situations where data isn’t available.
What are the disadvantages of intuitive decision making?
- Risky to rely on all the time
- Gut instinct can be irrational
What must a manager consider before making a decision?
- Risk
- Reward
- Uncertainty
Define ‘opportunity cost’
The cost of the next best alternative when making a decision.
What else must a manager consider when making a decision?
- Mission
- Objectives
- Ethics
- External environment
- Resource constraints
What are the advantages of decision trees?
- Visual representation of an outcome
- Quantitative and objective
- Accurate estimate of probabilities and benefits
What are the disadvantages of decision trees?
- Ignores non-quantitative data
- Probabilities are hard to predict accurately.
- Doesn’t include a wider range of outcomes
How would you calculate the expected value of the decision tree?
(Outcome 1 * probability) + (Outcome 2 * probability)
How would you calculate the pay-off of a outcome?
Cost of action / probability
How would you calculate the net gain of an action?
(Expected value 1 + expected value 2) - initial cost
Who are the internal stakeholders of a business?
- Owners
- Shareholders
- Employees
Who are the external stakeholders of a business?
- Customers
- Suppliers
- Government
What is stakeholder mapping?
Stakeholder mapping helps identify how much interest in and power/influence that each stakeholder group has. Each stakeholder group is mapped to a quadrant to determine how much communication is needed and how much attention they are paid.
